There is no doubt that buying an existing business has its risks, but it’s still a lot safer than starting one on your own. After several attempts to find that perfect business opportunity, seasoned entrepreneurs develop a natural ability to sniff out all the red flags and recognize that “diamond in the rough.”
Unlike startups, an existing business already has the necessary equipment and inventory necessary to run efficiently. In addition to its customers and employees, these businesses already have a location, and might even have a few years left on the lease. But perhaps more importantly, the business has a track record; meaning as a buyer you can look at their records, books and tax returns to get a sense of your potential income. So, you may be asking yourself, where is the risk?